Burford Capital Ltd
Burford Capital Ltd (BUR) is the provider of funds and investment management services to the legal market. The company is a market leader with the world’s most experienced, transparent and well-capitalised finance provider and is focused on the legal profession. The company has an employee base of 80 people working in the US, Europe and Asia-Pacific, who work with clients globally.
The company denounced the research report by Muddy Waters with respect to short selling of stocks with the intention of driving the share prices down. The company reiterated its sound position and access to capital and said that it has a proven track record of successful fundraising. It further stated that it had over $400 million of cash balances as on 5 August 2019 and the sharp slump in the stock price was strongly correlated to the reports which were used as a tool for manipulating the market and it wishes to solicit legal opinion and take appropriate action against the issuer of the report. It added that in scenarios such as these, if investors get carried away with these kinds of insights, then the research firms are successful in manipulating the market and interests of long-term investors might be harmed. The company repeated that it is committed to delivering better results with a long-term perspective.
Financial Highlights for H1 FY2019 (US$’000)
In H1 FY19, the company’s reported litigation investment income increased by 36 per cent to $264,992 thousand from $195,197 thousand in H1 FY2018. The company’s total income surged by 40 per cent from $205,205 thousand in H1 FY2018 to $287,043 thousand in H1 FY2019, mainly driven by an increase in income from investment, new initiative income and other income in the current half-year. In H1 FY19, the operating profit was $251,194 thousand versus $182,720 thousand in H1 FY2018. Profit for the year before taxation for H1 FY2019 was $231,461 thousand against $163,808 thousand in H1 FY18. The profit after tax increased by 36 per cent to $225,224 thousand in H1 FY19 from $165,567 thousand in H1 FY18.
In H1 FY19, the company registered a good financial performance. As a part of the growth plan, the company has arranged a record-breaking amount of new investment capital in the current half-year. The company’s new sovereign wealth fund is expected to improve the return on equity in the future. Burford Capital Ltd is continuously investing in growing its operations and is planning to expand its product offerings soon. However, the company needs to be more competitive to bring in new businesses and might not be able to diversify the risk associated with litigation income.
BUR Share price performance
Chart as on 07-August-19, before the market close (Source: Thomson Reuters)
While writing (as on 07 August 2019, at 02:39 PM GMT), BUR shares were trading at GBX 480.4 per share, down by 57.14 per cent as compared to the previous day’s closing price. The company’s Market capitalisation stood at £2.45 billion.
In the last 52weeks BUR shares have registered a high of GBX 2,075.00 (as on 29 August 2018) and a low of GBX 385.20 (as on 07 August 2019). At the current trading level, , its shares were placed at 76.84 per cent below its 52-week high price and 24.71 per cent above its 52-week low price.
At the time of writing, the stock’s volume before the market close, stood at 15,297,711. Stock’s average traded volume for 5 days was 1,910,160.80; 30 days- 1,016,781.03 and 90 days – 993,799.98. The company’s stock beta as on date was 1.04, which makes it slightly more volatile against the benchmark index. The stock has a dividend yield of 0.93 per cent.
The average traded volume for 5 days surged by 87.86 per cent against the 30- day average traded volume. The shares of the group (while writing) were trading lower than the 60-days and 200-days Simple Moving Averages (SMA), which implies a downtrend in the stock.
In the past 1 year, BUR shares have delivered a negative return of 38 per cent. Also, on a YTD (Year-to-Date) basis, the stock has plunged by approximately 32.31 per cent and was down by 27.91 per cent in the last three months.
Share’s RSI (Relative Strength Index) for 30-days, 14-days and 9-days was recorded at 31.84, 22.60 and 16.69 respectively. The stock’s 3-days RSI was recorded at 3.88.
BTG PLC (BTG) is a provider of healthcare instruments and services. The company specialises in intensive care for liver, emphysema and specialised drugs for acute disorders. It also operates in business licensing of products used in hip replacement and many other ailments. The intervention medicine segment includes certain coils which are used in the treatment of blood clots, varicose veins, tumours and other related disorders. The pharmaceutical segment includes products for use in treatment in cases of over-medication, snake bites, cancer, auto-immune diseases, and pregnancy.
As reported earlier, BTG PLC is all set to be acquired by BIDCO (a subsidiary of Boston Scientific). The transaction has been approved by the merger controlling authority. The company has applied for cancellation of trading of its shares with effect from 20 August 2019 at the London Stock Exchange.
Financial highlights for FY18
The company’s product sales were reported at £423.8 million in FY18 as against £387.3 million in FY17 due to sound progress made by the company in the domain of Interventional Oncology. The company’s revenues were £620.5 million in FY18 as against £570.5 million in FY17. This surge can be attributed to the sound progress made by the company in the licensing segment and royalties.
The company’s operating profit (adjusted) stood at £152.7 million in FY18 as against £129.6 million in FY17. The company’s basic EPS (adjusted) stood at 32.9 pence per share in FY18 as against 23.1 pence per share in FY17. This rise of 42 per cent in EPS can be attributed to higher profit after tax (adjusted) excluding non-controlling interests.
The company’s revenue from licensing surged by 9 per cent at CER (constant exchange rate) to £196.7 million in FY18 as against £183.2 million in FY17. The company’s revenue from interventional medicines segment rose to £242.9 million in FY18 as against £216.2 million in FY17. The company’s gross profit (adjusted) was recorded at £435.0 million in FY18 as against £391.6 million in FY17.
The company’s performance was encouraging in cash generation, with free cash flows recorded at £109.3 million in FY18 as against £64.7 million in FY17. The operating activities resulted in a cash flow of £120.7 million (up by 63 per cent) in FY18 as against £74.2 million in FY17 (IFRS basis). The company had cash balances of £210.0 million as on 31 March 2018 (£155.5 million: 31 March 2017). The current assets surged to £408.0 million.
The company has performed well within the year, with it’s Interventional Medicine segment performing satisfactorily and being the driving force for the company’s cash generation. The company has the financial strength and acumen to invest in innovation of products and plans acquisitions to expand its footprint across the world. This will further lead to value creation for the company and its stakeholders.
BTG Share price performance
Chart as on 07-August-19, before the market close (Source: Thomson Reuters)
While writing (as on 07 August 2019, at 02:01 PM GMT), BTG shares were trading at GBX 840 per share; up by 0.29 per cent as compared to the previous day’s closing price level. The company’s Market Capitalisation stood at around £3.24 billion.
In the last 52-weeks, BTG shares have registered a high of GBX 853.00 (as on 06 December 2018) and a low of GBX 502.50 (as on 09 August 2018). At the current trading level, , its shares were 1.52 per cent below its 52-week high price and 67.16 per cent above its 52-week low price.
At the time of writing, the stock’s volume before the market close stood at 1,424,291. Stock’s average traded volume for 5 days was 542,726.80; 30 days- 613,232.43 and 90 days – 670,997.82. The company’s stock beta was negatively correlated to the benchmark index.
The shares of the group (while writing) were trading higher than the 60-days and 200-days Simple Moving Averages (SMA), which exhibits an uptrend in the stock price levels.
In the past 1 year, BTG shares have delivered a positive return of 59.37 per cent. Also, on a YTD (Year-to-Date) basis, the stock has gone up by approximately 0.90 per cent and was up by 0.18 per cent in the last three months.
Share’s RSI (Relative Strength Index) for 30-days, 14-days and 9-days was recorded at 55.07, 56.14 and 56.10 respectively. The stock’s 3-days RSI was recorded at 48.97.